Recent Enforcement Actions By SEC’s Asset Management Unit Highlight New Proactive, Analytical Approach

Several enforcement actions announced by the SEC over the past month appear to be the early fruits of several initiatives launched by the SEC Enforcement Division over the past year. On September 22, 2010, SEC Director of Enforcement Robert Khuzami testified before the Senate Judiciary Committee that the Enforcement Division was launching "a range of initiatives designed to increase its ability to identify hidden or emerging threats in the markets, and to stop that misconduct early." Such initiatives included the creation of new national specialized units, such as the Asset Management Unit. The recently announced enforcement actions suggest that under these new initiatives, even minor violations may receive significant attention in an effort to identify and undercut potentially fraudulent schemes at their earliest stages. Indeed, Mr. Khuzami has analogized the new initiatives to the "broken windows" policing strategy employed in New York City in the 1990s, which focused